US Trade Representative Jamieson Greer told senators he hopes to reach interim trade arrangements with Canada and Mexico by year-end, while pushing tougher USMCA changes into 2027. The signal came the same week Trump imposed a fresh 50% tariff on roughly $20 billion of Canadian goods, clouding the path to any deal with Ottawa.
Washington wants quick interim trade deals with Canada and Mexico before year-end, but a fresh 50% tariff on Canadian goods is complicating any agreement with Ottawa.
Greer signals no full USMCA renewal this year
Testifying on Wednesday, Greer said he hopes to secure interim arrangements with each country before the end of the year, while pushing thornier changes to the US-Mexico-Canada Agreement into 2027. According to Reuters, he told the Senate Finance Committee: "I would love to have by the end of the year at least some arrangements".
He said tighter rules of origin for autos and labor and environmental standards would likely need more discussion with Congress next year, effectively confirming a full renewal will not happen in 2026. Michael Camunez, chief executive of Monarch Global Strategies, said the likely outcome is an interim political arrangement that leaves the hardest issues, and much of the investment uncertainty, unresolved.
Tariff relief sits at the center of the talks
Both Mexico and Canada are seeking relief from the Section 232 national security tariffs Trump imposed last year, 25% on autos and 50% on steel and aluminum. The pact and the North American Free Trade Agreement before it have shaped the region's economy for 32 years, underpinning nearly $1.6 trillion in once duty-free regional trade.
Washington is also pressing Mexico to raise regional content requirements for cars. It has tied progress on a Mexico deal to non-trade issues, including border security and compliance with a 1944 water-sharing treaty.
Canada left on the outside
Canada has been excluded from the bilateral talks in Mexico City, raising the risk that Ottawa must accept whatever terms Mexico agrees. Greer's testimony came the same week Trump slapped a 50% tariff on roughly $20 billion of Canadian goods, including beer, dairy and hockey sticks, in retaliation for Ottawa's own countermeasures.
Trump declined to renew the agreement on July 1, a move that starts a 10-year countdown to its expiration unless all three countries agree to renew it with changes. He has often threatened to terminate the pact he signed into force in 2020, pointing to the country's persistent trade deficits with both neighbours.
Sources: investingLive, Investing.com (Reuters)
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